Question

Purchase goods from Rahul on the list price of Rs.50,000 for cash at 20% trade discount and received 3% cash discount. Amount credited to discount a/c : ​

Answer 1

Answer:

the journal entry:

purchase a/c    dr   40000

      to cash a/c                   38800

      to discount given a/c    1200

Explanation:

as we dont enter the trade discount and only enter the cash discount into the books, the trade discount of 50000*20%=10000 is deducted from list price and calculated cash discount on it,(50000-10000)*3%=1200

now purchase price is 40000

and cas given is, 40000-1200=38800

thus discount considered is cash discount of 1200